President Barack Obama’s latest expansion of his administrations “home affordable” refinance program, outlined just before the July 4 holiday, could be huge news for tens of thousands of owners whose houses are seriously “underwater,” or where they’re worth a lot less than the mortgage balance owed on them.
Under the new rules, even where borrowers have negative equities of as much as 25 percent, they may be able to refinance into better loan terms, provided their mortgage is owned or guaranteed by Fannie Mae or Freddie Mac. Old rules had a maximum cutoff of 105% LTV.
It is estmated that 80,000 have refinanced through FNMA and FHLMC however the old rules were too tight to help many homeowners, the new program also allows the possibility of shorter loan pay-off terms to reduce mortgage principal debts much faster if the homeowner wishes.
This is big news for homeowners. Contact your lender and see if you are eligible.
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